Bumi companies need to go back to basics, says Teraju

 Nik Nazree Nik Abdul Rahman, the agency’s strategic services division senior director, says these fundamentals are necessary as they are precursors to growing their business.

The basic fundamentals must be in place before Bumiputera businesses can be raised to the next level, says Teraju’s strategic services division senior director Nik Nazree Nik Abdul Rahman.

PETALING JAYA:

 A government agency said Bumiputera companies need to go back to basics, noting that poor governance had plagued many of these enterprises, hampering their ability to secure loans for expansion.

Nik Nazree Nik Abdul Rahman of the Bumiputera Agenda Steering Unit (Teraju) said some companies that generate over a million ringgit in annual sales fail to secure loans because “their books were all over the place”.

He said these companies, for instance, failed to prepare financial statements properly or report their earnings to the Inland Revenue Board  (LHDN), noting that such tasks are fundamental to running a business.

Nik Nazree Nik Abdul Rahman.

“We have to go back to basics and tell them that they cannot have their books all over the place, and that it is a precursor for them to scale their business.

“You need to make sure your building blocks are in place. A student who intends to study algebra needs to understand basic maths first,” Nik Nazree, who is Teraju’s strategic services division senior director, told FMT.

He added that only after the fundamentals are in place can these Bumiputera businesses be raised to the next level.

Nik Nazree was elaborating on his comments late last month on gauging the success of programmes supporting Bumiputera enterprises, which should be based on whether the initiatives accomplish their end goals, including helping the community improve their livelihood.

On why these companies did not have the basic fundamentals, Nik Nazree said in some cases the entrepreneurs were forced to start their own businesses because they might have lost their jobs.

The Covid-19 pandemic, he said, was a “game changer” that saw many pivot to earn a living, and because they were relatively new to the industry, they would focus on generating income via sales.

“And when you’re firefighting on a daily basis, even though they make money, most of them are very bogged down with operational matters.

“Bookkeeping, strategy and business forecasting are not priorities for them in this situation. They are living hand to mouth.”

Nik Nazree said when Teraju realised that these Bumiputera companies lacked the basic fundamentals, it introduced three new initiatives called “Ascend, Enhance, Xcelerate” to facilitate their business growth.

Collectively, these initiatives, launched in February, are among four new programmes aimed at creating real business value and preparing these companies for national and regional markets.

According to Nik Nazree, these initiatives represented a form of “intervention” on the government’s part, where Teraju assessed these companies and provided assistance addressing their specific needs.

“We are not dispensing ‘Panadol’ to these companies to fix their shortcomings.

“We are diagnosing the disease properly and giving them the right medication,” he said. - FMT